Commercial Solar can be a great investment but it’s also an enigma. Oftentimes commercial solar is referred to as C&I, referring to commercial and industrial scale. This type of solar requires different solar designs, solar panels and project sizes. Very different from residential solar.
If it’s such a great investment why isn’t it more popular? Growth has been slow but we think there will be significant growth within the next few years. It can really have amazing big rewards. Let’s focus on the uniqueness of commercial solar.
What exactly is Commercial Solar?
Commercial solar is simple and the most basic definition is that the solar is designed for business instead of residential. However, commercial solar requires different steps at a greater scale. This means commercial solar can be installed on small businesses, large corporations, government buildings, universities, nonprofits and schools.
Commercial solar can be performed as ground mounts or on rooftops, depending on the buildings energy needs it can be sized in kilowatts and megawatts. C&I range from 50 kilowatts (kW) for places like synagogues and churches all the way to 400 kW for universities.
Researchers at UC Davis conducted a study with Aurora solar software and looked at some of the largest commercial buildings located in the United States. One of the largest commercial buildings is an aerospace company located in Texas. With a whooping 770,000 square meters of rooftop, they could generate at least 88 million kilowatt hours (kWh) of solar power. How much does that equal? It can power at least 5,200 homes for a whole year and offset 47,800 metric tons of CO2.
It’s important to point out that although this is an exaggerated calculator, since the site wasn’t actually developed with solar energy, It helps with the visualization of how great of an impact commercial solar can have.
The Commercial Solar Market
As you can see how much of an impact commercial solar can have, it’s growth has been substantially slow. PV Magazine said “C&I solar markets have been a relative challenge for solar developers to exploit.”
Cost of Commercial Solar
There are many factors that have the commercial and industrial solar lagging behind residential solar. One of the reasons is that electricity for commercial buildings has been at an all time low which makes it tricky and unattractive for business owners.
In general commercial electricity is 15% or lower price per kilowatt-hour rate than electricity for homes. This according to the U.S. Energy Information Agency.
According to the U.S. Energy Information Administration, in February of 2021 the average cost of electricity for U.S. residential customer was 13.3 cents per kilowatt hour (kWh) while the average cost for a commercial building was 11.9 cents per kWh.
Commercial Solar Barriers
Many business owners who occupy the building rent the space out and the building owner. Oftentimes it’s the renter who has to pay for the electricity bill and the building owner might not see it as a worthwhile investment.
Other types of solar barriers are how much of a mismatch a lease and PV financing terms can be.
Solutions for Solar
Many of these challenges are being overcome by working on the structure of how the cost of commercial solar works. It’s being structured to benefit both the renter and owner of the business. There are also financing options that are more beneficial and competitive.
A great option for small businesses is a commercial PPAs. Since then there are no high up front costs.
Commercial Solar Scale
Solar Energy Industries Association reports that, 1,286 (MW) of commercial solar was installed in 2019, with about two-thirds of corporate capacity being installed in 2015. Tracking 8,300 (MW) of commercial solar projects in the United States. In other words there was enough commercial solar installed to power 1.6 million homes.
Unfortunately, commercial solar is greatly trailing behind residential solar installations even though the jobs are larger in size.
Due to the pandemic commercial solar was affected and came in 4% less than in 2019.
Potential Solar Growth
Given how beneficial commercial solar can be, the barriers are being knocked down and the potential to install solar is greatly.
Benefits of Commercial Solar
There are so many great benefits for commercial solar – from building owners, tenants, installers, financers and of course the environment.
Building owner benefits by increased income and longer leasing terms.
Tenants reduce their utility bills and also save an exponential amount of money.
Everyone benefits from going solar both commercial and residential.
So if you are ready to go solar contact Sunline Energy for a free estimate by filling the form below or call us at (858) 252-2280.